This study points out that Indonesia is a country with high diversity, where differences between regions can be shown from the different characteristics of natural, economic, social and cultural rights. Distribution of resources of nature, especially ...
See More +This study points out that Indonesia is a country with high diversity, where differences between regions can be shown from the different characteristics of natural, economic, social and cultural rights. Distribution of resources of nature, especially oil and gas, as well as the growth center of commerce and industry are concentrated in some areas and this led to the emergence of pockets of growth. Conversely, some areas are still relatively growing slowly. This has resulted in a regional output gap and welfare among regions. Decentralization policy which aims to bring minimal services to the community and increase economic growth is constrained by the widespread expansion areas that impact the increasing number of disadvantaged areas and the decrease in potential resources. To overcome the negative effects of decentralization, the government has taken various efforts to reduce inequality of development among regions, whether in the form of framework regulatory and budgetary framework, but these efforts have not been effective. The ineffectiveness of efforts of reduction of inequality between regions is due to lack of impartiality among the allocation budget to the regions lagging behind and has not been the synergy of local development planning set by the central government and local governments.
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